An Auction For Amvescap
As we noted yesterday, several published reports have indicated that Goldman Sachs GS may buy Amvescap AVZ, the sprawling fund company that runs the AIM and Invesco funds (including all the former GT Global funds). Although an Amvescap spokesman dismissed a British financial paper's report that the firm is currently mulling over an actual Goldman Sachs offer, it's possible that the two could get together at some point. As a detailed story in the May issue of Institutional Investor outlines, Amvescap has reasons to be interested in a buyer -- not least of which the money it could mean for insiders. For its part, Goldman Sachs, a latecomer to the retail mutual-fund arena, would get a large portfolio of well-known funds as well as further inroads into foreign markets.
What would such a deal mean for shareholders of AIM, Invesco, and Goldman Sachs funds? Quite possibly, confusion. After all, Amvescap is still struggling to absorb the former GT Global funds it took over when it bought Chancellor LGT in 1998. Those woeful funds certainly needed new direction and new managers, but what they've gotten is a never-ending string of convoluted manager changes. Add to this mix Goldman Sachs -- which has historically catered to corporations and wealthy individuals, not the mutual-fund market -- and there's no telling what will result. Given this background, there's little reason to expect that shareholders of AIM, Invesco, or Goldman Sachs funds would benefit from a merger -- though shareholders of the Amvescap and Goldman Sachs firms might.
Candid Words from the Golf Course
It's more or less common knowledge that Wall Street analysts often pull their punches when discussing the companies they cover, either to safeguard their access to the company's executives or to ensure that their own firm can get lucrative underwriting deals from that company. Rarely, though, does an analyst confess that conflict of interest publicly.
Today, though, such an admission appears in a surprising place, the Wall Street Journal's annual awards section celebrating "All-Star Analysts." The winner of the bronze medal in the casinos category, Bruce Turner, is no longer an analyst. He quit, he says, because it had become an "impossible task" to balance the conflicting interests of investors and the firm's corporate clients. "It was great for 10 years, and I am pleased that I escaped with my integrity largely intact," he says.
So what's the former Salomon Smith Barney all-star doing now? Playing golf and managing his own money. Thus he confirms another poorly kept secret about Wall Street analysts: They make a lot of money.
Rest Easy, Stay-at-Home Investor
In case you haven't heard, Jim Rogers -- a wealthy investor, author of Invstment Biker, and regular guest on CNBC -- is on another trip around the world. Last time, he went by motorcycle; this time, a bright yellow sports car. He started in Iceland, drove through Ireland and Britain, and on through Western and Eastern Europe and beyond. He had reached Kazakhstan when an intrepid reporter for the Central European Economic Review caught up with him for an in-depth interview.
From an investing standpoint, the encouraging news is that so far, being rich and adventurous enough to take a three-year world tour hasn't given Rogers any advantage over you sitting in your living room. In the interview, he recites a depressing list of political and economic problems that he has encountered in the first 14 weeks of his journey. Then comes the final blow.
CEER: "That's a very downbeat assessment. Apart from all of the negative things you've seen, did you see any good investments along the way?"
Let's hope the poor guy finds some happier situations in the next two and three-quarters years of the trip.
Stat du Jour
12: The number of Goldman Sachs funds with five-year records (not counting multiple share classes).
An Auction For Amvescap